Question

When the supply of bubble gum increases while the demand for bubble gum decreases, the equilibrium ________ of bubble gum will definitely ________, ceteris paribus.a. price; increaseb. price; decreasec. quantity; increased. quantity; decrease

Answer 1

Answer:

The correct answer is option b.

Explanation:

The equilibrium price and quantity of a product are determined through the interaction of demand and supply curves of the product.  

An increase in the supply will cause the supply curve to shift to the right. While a decrease in the demand will cause the demand curve to move to the left.  

This will cause the price of the product to decline. The change in the quantity, on the other hand, depends on the magnitude of change in the demand and supply.

Answer 2

Answer: quantity; decrease

Explanation:

A simultaneous decrease in the willingness and ability of buyers to purchase a good at the existing price, illustrated by a leftward shift of the demand curve, and an increase in the willingness and ability of sellers to sell a good at the existing price, illustrated by a rightward shift of the supply curve. When combined, both shifts result in a determinant change in equilibrium quantity and a decrease in equilibrium price.

A demand decrease results from a change in any of the five demand determinants. A supply increase results from a change in any of the five supply determinants. By itself, a demand decrease results in a decrease in equilibrium quantity and a decrease in equilibrium price. By itself a supply increase results in An increase in equilibrium quantity and a decrease in equilibrium price. A simultaneous decrease in demand and increase in supply unquestionably generates a decrease in the price. However, the change in the quantity is indeterminant. It might decrease or increase depending on the magnitude of the demand and supply changes.

a demand decrease results in a decrease in equilibrium quantity and a decrease in equilibrium price